Revenues at Valeo Foods near €1bn as it gears up for sales spurt due to Covid

The Irish food company that owns Jacobs biscuits and Batchelors beans is firmly on course to break the €1 billion sales barrier in 2021 after it posted revenues of more than €942 million last year.

Valeo Foods, whose roster of ambient food brands also includes Chef sauce and Odlums flour, made two acquisitions half way through its financial year last year, which ran until the end of March 2020.

If those deals had been completed at the beginning of the financial year, group sales would have hit €1.025 billion, its accounts suggest.

Run by former Aer Lingus executive Seamus Kearney, Valeo is headquartered in Dublin, and backed by Cavan dealmaker Seamus Fitzpatrick's Capvest private equity group.

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Since it was formed in 2010, Valeo has been on an acquisitions spree, mopping up 17 other businesses such as Italian biscuit-maker Balconi and the European arm of the company that makes Kettle crisps.

In a note attached to the accounts Valeo’s directors say Covid-19 has dampened its trade with hospitality outlets, but has had a “broadly positive” impact on sales of pasta, honey, flour and canned goods throughout the pandemic as locked-down consumers splurge on groceries and bake at home.

Valeo supplies most of the major grocery multiples, whose sales have all rocketed since the pandemic arrived on Irish and UK shores towards the end of its last financial year. It accounts say its biggest customer, likely to be a major supermarket chain such as Tesco, accounts for more than 10 per cent of its turnover, while its top three combined account for almost a quarter of sales.

The group’s profits after tax jumped from €21.6 million to €52.8 million, the accounts state, although much of the rise is accounted for by €28 million of exceptional income related to its disposal during the year of cake decorations business Nimbus.

Balance sheet

Valeo’s balance sheet shows assets of €1.4 billion, while it had loans of €897 million. It says that in August of last year it struck an agreement with its syndicate of bank lenders to push out the repayment date on its loans and get a better deal on interest rates.

The biggest chunk of its sales, about 46 per cent, is accounted for by trading in the UK. A further 31 per cent is via sales to Irish customers, while the rest is spread across Europe and further afield.

Notes to the 2020 accounts suggest its management assume ongoing growth rates of 2.9 per cent for its Irish business, 4.4 per cent in the UK, and 8 per cent in Europe.

Its acquisitions during the financial year of Christmas pudding-maker Matthew Walker and Kettle, both completed in October 2019, added €75.6 million to group turnover, but would have contributed €159 million in a full year.

In addition to its ambient grocery products, Valeo has also expanded heavily into sweets and confectionery, picking brands in recent years that include the children’s sugary classics Dip Dabs and Fruit Salads.